Passionate about IP! Since June 2003 the IPKat has covered copyright, patent, trade mark, info-tech, privacy and confidentiality issues from a mainly UK and European perspective. The team is Eleonora Rosati, Annsley Merelle Ward, Neil J. Wilkof, and Merpel. Nicola Searle is currently on sabbatical. Read, post comments and participate! E-mail the Kats here

The team is joined by GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopolou, Mathilde Pavis, and Eibhlin Vardy

Tuesday, 31 October 2017

If the title of the post does not ring a bell, then you are not a Dr Seuss fan. In any event, Tom Reid (Accenture and AusKat) is back in action with a summary of AIPPI's resolution on the protection of Graphical User Interfaces (GUI) from Sydney. Tom reports on the goings-on:

"Delegates at this year’s AIPPI conference
avoided swallowing their gum when they passed a resolution on IP protection for
graphical user interfaces (GUIs).

The resolution defines a “GUI” as “an
interface which allows users to interact with electronic devices through
graphical elements instead of typing characters”—basically, for desktop
computers, everything that came after command-line interfaces, and for phones,
everything beyond simple telephone number input. Many of those born after the mid-1980s, who may
never have used a computer or a phone without a GUI, may think of the GUI and
the device as ontologically one and the same, at least in everyday use. The perceived value of a
meticulously-designed GUI in the consumer marketplace was of course amply demonstrated
by the smartphone wars.

The focus of AIPPI’s definition, and
therefore ultimately the resolution, is on visual elements: icons, menus,
scroll bars, windows, transitional animations, and dialogue boxes. The resolution does not specifically address
non-graphical elements of a GUI, such as sounds (where used as auditory
signals, eg calendar alert tones, or as input, such as voice recognition) or other
sensory interfaces (eg haptic cues such as vibrating alerts, and Apple’s “Force
Touch” input feature) and the interesting questions these might raise (could a
particular vibration pattern, say, be registrable as a trade mark?).

Put very simply, the resolution states permissively
that GUIs “should generally be capable of protection” by patents, designs,
copyright, and trade marks. While on its
face a somewhat anodyne statement, there is some elaboration.

In relation to designs protection, which has
been a focus of the relevant WIPO Standing Committee recently,
the resolution states that a GUI should be protectable by design rights without
requiring a connection to a physical device; that statement is relevant to
those common law jurisdictions, including Australia, where designs protection
has in practice been limited to the physical form of a product (the “at rest”
concept). Expanding on that, the
resolution states specifically that movements and transitions (think of the way
an Apple OS X desktop window “funnels” into the Dock when minimised, as a
classic example) should be protectable by design and trade mark rights, and
that registration authorities should allow the filing of data that can
dynamically represent them in their true form, as opposed to permitting only
drawings that imperfectly reproduce them statically.

In addition, the statement that GUIs
“should generally be capable of protection by patents” perhaps implies that
software should not, per se, be unpatentable subject matter, insofar as GUIs
are ultimately embodied in code (sometimes in the broader sense of
firmware). The patentability of
computer-implemented inventions was, however, the topic of a separate and
specific AIPPI resolution at the same conference.

These things aside, while some individual
elements of a GUI—an icon or a desktop background, for example—are already capable
of protection in most jurisdictions today by at least some combination of traditional
copyright, design, or trade mark (and related) rights, the system is patchwork,
and the nature and scope of protection offered varies greatly depending on the
head of IP into which the element is to be shoehorned. For some decades now, the wider question has,
of course, been whether the GUI overall, and its look and feel in particular, should
be more specifically protectable in some way, perhaps by a tailored sui generis
right. The question is becoming more pressing
as the importance of the “user experience” is consolidated in the consumer arena
and expands to commerce and industry; white collar workers will recall how
recently it was that the office computing environment invariably lacked any of
the slickness of their gadgets at home, but that situation is now beginning to
change.

AIPPI delegates resolved in
favour of a statement that sui generis protection should not be necessary, having regard to the protection that “should be
available” under existing heads of IP. But
the key words there are “should be available”, recognising that where traditional
IP rights (especially patents) are curtailed in their application to GUIs, the
scope of protection available may not be adequate. What AIPPI considers should be done, if
anything, if that situation persists remains to be seen."

Kat friend Matej Michalec, from V4 Legal in Slovakia, has shared a thoughtful blog post about the challenges of registering a EUTM when the mark contains characters in a pictorial language, such as Chinese.

"Guangzhou Baiyunshan Pharmaceutical Holdings Co., Ltd. (GBP or the Respondent) sought to register a figurative mark, in Classes 5, 30 and 32, containing a device with three fancifully interconnected Chinese characters 王老吉 (pronounced as Wang LAO JI according to Pinyin, i.e. the official romanization system of the Chinese characters), encircled by English text: "Authentic Herbal Tea Wellucky Since 1828". The application was opposed by Multi Access Limited (MAL or the Appellant) on the basis of four of its earlier EUTMs, namely the word mark WANG LAO JI and three marks containing the same Chinese characters 王老吉 (see below). MAL invoked Article 8(1)(b) EUTMR, which provides for a relative ground for refusal of a EUTM application, if, considering the similarity/identity of the marks and goods covered by them, there exists a likelihood of confusion on the part of the relevant public in the EU (in case of EUTMs). The goods were assumed to be identical.

The opposition was rejected by the Opposition Division. MAL appealed. By its decision from 21 March 2017, the Second Board of Appeal dismissed the appeal (R 888/2016-2). The main issues were the the relevant territory and public. The BoA observed that for a EUTM application to be refused, it is sufficient that grounds under Art. 8(1)(b) exist only in part of the EU in light of the users likely to use both the goods covered by the earlier mark and the mark applied for. MAL had claimed before the Opposition Division that the target consumers are Chinese or people with Chinese ancestry who are able to read Chinese and who are living in the EU. On appeal, Appellant sought to extend the target consumers to other Asians, in particular Japanese and Koreans, as they are able to understand Chinese characters to a certain extent.

The BoA referred to the ‘EL BAINA’ judgement (C-147/14), where the CJEU took into account that the relevant public consisted of Muslim consumers of Arabic origin who consume ‘halal’ food products in the EU and have at least a basic knowledge of written Arabic. Furthermore, the CJEU reasoned that for the purposes of assessing the likelihood of confusion between the marks which cover the same or similar goods and contain a dominant Arabic word both in Latin and Arabic script, the meaning and pronunciation of those words must be considered in cases where the relevant public has a basic knowledge of written Arabic.

However, in applying these principles to the current matter, the BoA stated that ‘halal’ food can be considered as targeting a specific Muslim public, unlike Chinese foodstuffs or medicinal and herb products, which are commonly consumed by the average European consumer. Moreover, the BoA opined that although some of the contested goods in Classes 5 and 30 can relate to Chinese nutrition or medicine, the other goods specified in Classes 5, 30 and 32 do not share this feature. Therefore, the BoA reasoned that the lists of goods do not support the conclusion that the products concerned are sold in special Asian stores to clients of mostly Chinese or Asian background more generally.

In addition, the BoA held that it is questionable whether Chinese-speaking people can be considered as forming a substantial portion of the consumers in the EU. The Appellant submitted Wikipedia extracts, according to which people of Chinese/Asian ancestry formed 1.23% of the German population, 0.94% of the population in France and 0.7% in the UK. The BoA questioned the value of data accessible through Wikipedia, but in any case, the values were too small to support the conclusion that a substantial portion of the EU is composed of people having Chinese/Asian origin.

Thereafter, the BoA proceeded with the comparison of the signs. It found that given that the mark was aimed partly at average consumers and partly at professional circles (Class 5) in the EU, the Chinese script as a whole is not understandable by the relevant public. Visually, most of the ‘relevant’ consumers will consider the characters in the contested sign as a combination of lines arranged in a circle, a figurative device having a decorative character, corresponding to something possibly of Asian origin, as opposed to the earlier EUTMs 2), 3) and 4), which will be perceived as depicting three Asian characters (or six in the case of the earlier EUTM 2)).

Phonetically, the earlier EUTMs 2), 3) and 4) will not be pronounced, thus the aural comparison consisted of juxtaposing the earlier EUTM 1) (WANG LAO JI) to the WELLUCKY part of the contested sign, holding them to be aurally dissimilar. Lastly, only a very low conceptual similarity was found, specifically in relation to Class 5, consisting of a weak link to goods of Asian origin (or possibly Chinese medicine). As a result, no likelihood of confusion was found. (Chinese speakers can find a good summary here.)

Background and Commentary

While perhaps not particularly known among the average EU consumer, in China (including Hong Kong), where it is recognized primarily as a herbal tea brand sold in red cans, 王老吉 is as popular as Coca Cola (see the picture below).

It is noted that the predecessor to the current GBP holding company had licensed the mark to Hong Kong Hong Dao Group (HKHD), authorising it to sell herbal tea in red aluminium cans. HKHD then established Jia Duo Bao Ltd. (JDB) to manufacture red cans labelled王老吉, while the predecessor to the GBP holding company continued to sell herbal tea under the same brand in paper packaging. JDB turned 王老吉 into a huge success. This led to a dispute between GBP and JDB, resulting in the termination of some licenses in 2010 and invalidation of others in 2012. Subsequently, GBP sold herbal tea 王老吉in the red cans while JDB designed its own 加多寳 (Jia Duo Bao) red cans (see above).

It is noted that the predecessor to the current GBP holding company had licensed the mark to Hong Kong Hong Dao Group (HKHD), authorising it to sell herbal tea in red aluminium cans. HKHD then established Jia Duo Bao Ltd. (JDB) to manufacture red cans labelled王老吉, while the predecessor to the GBP holding company continued to sell herbal tea under the same brand in paper packaging. JDB turned 王老吉 into a huge success. This led to a dispute between GBP and JDB, resulting in the termination of some licenses in 2010 and invalidation of others in 2012. Subsequently, GBP sold herbal tea 王老吉in the red cans while JDB designed its own 加多寳 (Jia Duo Bao) red cans (see above).

Numerous lawsuits ensued in China between the two, with the most recent ruling by the Supreme People’s Court in Beijing from this August, here, allowing both companies to use the red can packaging, because both of them contributed to its commercial success. (Chinese speakers can find a good summary here.) It appears that the proceedings before the EUIPO are just a EU sequel to the trademark battle taking place in China.
In the present case, the BoA was not persuaded that the relevant public was composed of people of Chinese/Asian origin or that there was a likelihood of confusion.

Perhaps more persuasive evidence on the relevant public or distinctiveness could have been submitted to change that perception. For example, data from more reliable sources, such as the 2011 UK census analysis by the Office for National Statistics (supported by similar evidence from other EU countries) would have shown that there are more than four million people of Asian/Asian British origin living in England and Wales alone, and that Chinese is one of the top 10 ‘Other’ languages used. Similarly, limiting the list of goods to those specifically relating to China could have perhaps tipped the scales in favour of a ruling that the relevant public is composed of people of Chinese/Asian origin.

Further, one may ask whether, in today’s globalized world, treating Chinese (and other alphabet) characters as "mere" figurative marks (stripping them of its conceptuality) is appropriate (See paras. 52 and 83 of the BoA decision). The Chinese Trademark Office is able to assess likelihood of confusion between signs in Latin script. We also note the treatment by the Canadian Trademark Opposition Board, confirmed on Appeal (see, for example, Cheung's Bakery Products Ltd v. Saint Honore Cake Shop Limited) and the UK Comptroller-General, considering the marks in question from the perspective of a consumer of Chinese origin (Wang Lei vs. China National Cereal Oils & Foodstuffs Import & Export Corporation). Wider use could also be made of Sinology experts (as was the case here, albeit his opinion did not change the BoA’s view).

All in all, considering the growing importance of Chinese commercial activity, the ever-increasing number of Chinese tourists, and the sheer number of Chinese speakers, it is fair to predict the growth of the use and influence of Chinese character trademarks in the EU (for those watching UEFA Europe League have a look at the football jerseys of Slavia Prague). Will trademark law adapt to this reality?"

The internet has been posing a number of challenges, including with regard to exploitation and use of protected content, and enforcement of relevant rights.The IPKat friends at Informa wish to let readers know that the popular conference Internet and Digital Media Law will be returning to London also this year, and will be held on 5 December 2017. The agenda, among other things, includes a discussion of latest developments in the protection of copyright over the internet, Internet of Things, Artificial Intelligence, as well as relevant internet law jurisprudence.The speaking faculty will be composed of experts from a variety of backgrounds and jurisdictions, also including 1709 Blog contributor John Enser (CMS).IPKat readers will be able to claim a 20% discount when registering here. It will be sufficient to use the VIP code FKW82756IPKE.

Patent practitioners have been speculating in recent weeks about what the Actavis v Eli Lilly Supreme Court judgment means in practice and how that decision might be applied. One issue is how far the doctrine of equivalents articulated by the Supreme Court extends - does it apply when novelty is being assessed?This is one of a number of interesting issues addressed in the recent decision of Generics (U.K.) Limited and others v Yeda Research and Development Company Limited and others[2017] EWHC 2629 (Pat) - the first application of Actavis v Eli Lilly in the Patents Court. The answer on novelty, according to Arnold J., is that the doctrine of equivalence does not apply. This marks a significant departure from the previous position that a patent claim be interpreted in the same manner for the purposes of validity and infringement.

Background

The Claimants, Mylan and Synthon, sought revocation of European Patent (UK) No. 2 949 335 entitled "Low frequency glatiramer acetate therapy". Yeda is the registered proprietor of the Patent and Teva is the exclusive licensee. The Patent is directed to a dosage regimen for the administration of glatiramer acetate (GA) for the treatment of relapsing forms of multiple sclerosis consisting of three subcutaneous injections of 40 mg GA every seven days with at least one day between each injection.

Teva markets GA under the trade mark Copaxone. Worldwide sales of Copaxone in the year ending 31 December 2016 were about $4.2 billion, representing nearly a fifth of Teva's worldwide sales and a significantly higher percentage of its profits. The Claimants have previously introduced a 20 mg GA generic product, and here they sought to clear the way for the launch of a 40 mg GA generic product for which they obtained a marketing authorisation on 5 October 2017. There was no dispute that, if the Patent is valid, the Claimants' intended acts in relation to their product would infringe it.

Application of the doctrine of equivalents

Before the recent Supreme Court decision in Actavis v Eli Lilly, it was settled law that the claim should be interpreted in the same manner for considering the purposes of novelty and infringement. One issue upon which the Supreme Court judgment is silent is whether the doctrine of equivalents has any impact on the law of novelty (the Supreme Court's 3-step formulation is replicated at the end of this post for ease of reference). Arnold J. explained that he would not consider this matter at length, given that he held the Patent invalid for obviousness in any event.
The Claimants submitted that it remained the law that a claim lacked novelty if the prior publication disclosed subject-matter which, if performed, would necessarily infringe the claim. Even if the subject-matter would not fall within the claim on its proper interpretation, it was sufficient that the subject-matter would infringe the claim applying the doctrine of equivalents. Otherwise, a claim could be infringed by a person who did exactly what the prior publication taught, yet the claim would be novel over that prior publication, and that would be a radical departure from English patent law as it had previously been understood for many decades.
The Defendants maintained that a claim would only lack novelty if the prior publication disclosed subject-matter which fell within the claim on its proper interpretation - it was not sufficient that the subject-matter would infringe the claim applying the doctrine of equivalents. This was because: (1) in Synthon v SKB (which is authority for the proposition that what infringes must constitute disclosure) - the House of Lords had not been considering the question of anticipation by equivalents, because at that time it was not possible to infringe by virtue of a doctrine of equivalents if the alleged infringement fell outside the claim on its proper interpretation; (2) it is established in the jurisprudence of the Boards of Appeal of the EPO that a claim is not deprived of novelty by an obvious equivalent of a feature in a prior publication; and (3) the decision of the Supreme Court was based on Article 2 of the Protocol on the Interpretation of Article 69 of the European Patent Convention, which is concerned with the extent of protection conferred by a European patent or patent application (i.e. infringement, not validity).
The judge concluded without further elaboration that the Defendants' position is correct, i.e. the doctrine of equivalents has no application in the law of novelty. However, in case he was wrong, the judge went on to consider whether the patent would have lacked novelty on the basis of a doctrine of equivalents, and concluded that the claims would have indeed been anticipated by the "Pinchasi" prior art cited by the Claimants (see paragraphs 167 - 173 for further details of that analysis).

Happy Halloween from the IPKat

Availability of Arrow declarations?
In addition to their application for revocation of the Patent, the Claimants sought an Arrow declaration (following recent confirmation from the Court of Appeal that there is jurisdiction to grant such relief - see previous IPKat posts here and here). By way of background, the Patent stems from a divisional of European Patent 2 405 749 ('749). On 2 February 2017 Teva withdrew the text of '749 before a Technical Board of Appeal could rule upon its validity in the light of (among other citations) Pinchasi. There was no dispute that Teva has filed two further pending divisional applications which cover the 40 mg TIW regimen for administration of GA, namely European Patent Applications Nos. 2 630 962 ("962A") and 3 199 172 ("172A"). The declaration sought by the Claimants was as follows:

"A declaration that the use of the Claimants' Product for treating a patient suffering from relapsing forms of MS wherein the Claimants' Product comprises glatiramer acetate for administration in a regimen of three subcutaneous injections of a 40mg dose of glatiramer acetate every seven days with at least one day between each subcutaneous injection would have lacked novelty and/or been obvious as at 20 August 2009 insofar as the dosing regimen is concerned."

Applying the principles laid down by the Court of Appeal in FKB v Abbvie, Arnold J. declined to grant an Arrow declaration, principally because it would have no greater persuasive value than the reasoned judgment of the Court on the validity of the Patent (see paras 205-212 for further details). Guidance on multiple expert witnesses
The Court also provided stern guidance for litigants who rely upon duplicative expert evidence in patent cases. It was common ground between the parties at the CMC that there was potentially a need for expert evidence in the fields of (i) clinical treatment of MS, (ii) neurology and (iii) statistical analysis of clinical trials. The Claimants put forward one expert to cover all three issues, while the Defendants called two expert witnesses, whose reports "substantially duplicated each other. The duplication was made manifest, rather than avoided, by the fact each expert repeatedly stated that he agreed with passages in the other expert's reports." The judge noted that "where parties adduce evidence from more than one expert, the evidence of the respective experts should be clearly delineated. Parties who flout the guidance which the courts have repeatedly given can expect to be heavily sanctioned in costs. " (para 83)

"i) Notwithstanding that it is not within the literal meaning of the relevant claim(s) of the patent, does the variant achieve substantially the same result in substantially the same way as the invention, ie the inventive concept revealed by the patent?

ii) Would it be obvious to the person skilled in the art, reading the patent at the priority date, but knowing that the variant achieves substantially the same result as the invention, that it does so in substantially the same way as the invention?

iii) Would such a reader of the patent have concluded that the patentee nonetheless intended that strict compliance with the literal meaning of the relevant claim(s) of the patent was an essential requirement of the invention?"

Asked what EU development has had the biggest impact - for better or worse - on UK copyright, Sir Richard highlighted at the outset how a number of developments would have occurred independently from UK membership of the EU. These include the changes mandated by the WIPO Copyright Treaties, TRIPS, the Marrakesh Treaty and the Beijing Treaty. However, there have been also legislative interventions prompted by EU membership, including the introduction into UK law of the resale royalty right (droit de suite).

In all this, however, the learned judge noted that what has had a systemic impact has been in particular the jurisprudence of the Court of Justice of the European Union (CJEU), which has touched upon basic concepts such as originality (which Prof Derclaye said to require more than just sufficient skill, labour or effort, as per the traditional UK approach) and has resulted in UK courts embedding - as is apparent from the SAS case - the idea/expression dichotomy into UK law. Also Mr Saunders stressed the relevance of CJEU jurisprudence, and discussed the case of the right of communication to the public, which so far has been subject to nearly 20 references for a preliminary ruling.

I asked Sir Richard whether he thought that CJEU case law also mandates an open-ended approach to copyright subject-matter. Sir Richard and the other panellists noted that it is not sure that EU law - or rather CJEU interpretation of it - requires to adopt this approach and possibly (but not necessarily) further clarity might be provided when the CJEU decides Levola Hengelo, C-310/17, ie the cheese case [see here].

The discussion then moved to the policy initiatives that UK Government might need to take in the copyright area. Ms Lynch highlighted how, compared to other areas of IP, copyright is not particularly problematic. However, some adjustments would be required, eg with regard to the database right, and the country of origin principle.

When asked about the perspective of UK creative industries, Mr Moss noted how there are some pressing issues to address, including with regard to live performances. Uncertainties over immigration rules post-Brexit, as well as potential visa requirements for UK musicians and performers travelling abroad and EU nationals coming to the UK, should be addressed as soon as possible in order to avoid having to cancel shows that - for 2019 - have already started being arranged and booked. With regard to copyright rules, Mr Moss noted that certain aspects of the proposal for a directive on copyright in the Digital Single Market should be transposed into UK law, even in a scenario of hard Brexit.

Turning to the issue of enforcement, Mr Ohta noted that UK courts have developed a solid jurisprudence on jurisdiction over intermediary injunctions. The discussion then moved to the issue of responsibility for implementation costs of injunctions granted against intermediaries. It will be crucial to see what the UK Supreme Court decides in Cartier next year.

The audience engaged with questions and comments, and was particularly interested in the relevance of CJEU case law post-Brexit. According to s6 of the European Union (Withdrawal) Bill[see here for the progress of the Bill], "[a] court or tribunal— (a) [shall not be] bound by any principles laid down, or any decisions made, on or after exit day by the European Court, and (b) cannot refer any matter to the European Court on or after exit day." However, "A court or tribunal need not have regard to anything done on or after exit day by the European Court, another EU entity or the EU but may do so if it considers it appropriate to do so." What that will mean remains unclear.

As a final wrap-up question, I asked the panellists to indicate one area of copyright that they would like to see changed after Brexit, should the UK have the power to do so. Sir Richard noted that, although he was not indicating any specific preference, the UK might have a discussion around the re-introduction of s52 of the Copyright, Designs and Patents Act (CDPA)[which the UK repealed as a consequence of the CJEU Flos decision]. Prof Derclaye, Mr Ohta and Mr Saunders indicated case law on communication to the public as being in need of some rethinking, with Mr Saunders also adding the introduction of a new private copying exception [s28B CDPA was repealed shortly after it was introduced, on grounds that Government had failed to provide appropriate evidence as to why there was no need of a fair compensation requirement]. Mr Moss said there is no particular need to reform UK copyright law, although greater cooperation from intermediaries would be good. Considering how busy the UK IPO is already with other IP rights, Ms Lynch concluded by saying that she wishes that no immediate changes are necessary.

While the AmeriKat has been traversing the globe over the last few weeks, big changes in US patent litigation have continued apace, especially where venue is concerned - most recently in Re Cray. The AmeriKat's Californian friends at Fenwick & West - Bryan Kohm, Dadvid Tellekson, Melanie Mayer and Reilly Stoler - summarize the latest position on venue for the Kat's non-US readers:

"Recently, the United States Court of Appeals for
the Federal Circuit issued a decision in In
re Cray that will likely deal a serious blow to abusive forum shopping
engaged in by non-practicing entities.
28 U.S.C. § 1400(b)limits venue in patent cases to either where a
defendant “resides” or where it has both committed acts of infringement and
maintains a “regular and established place of business.” The Supreme Court’s decision in TC Heartland v. Kraft Foods, 137 S. Ct.
1514,earlier this year, held that the
first prong—“residence”—was limited to a company’s place of incorporation or
principal place of business.

The Cray decision addresses the standard for
determining what constitutes a “regular and established place of business”
under the second prong of Section 1400(b). Specifically, the Federal Circuit set
forth three requirements for a “regular and established place of business”: (1)
the location must be a “place,” (2) that place must be “regular and
established,” and (3) the place must be “of the defendant.” Applying these requirements, the Federal
Circuit held that petitioner Cray’s employment of a remote employee in the
Eastern District of Texas did not create venue in that district as to
Cray.BackgroundIn the United States, venue in patent cases is governed by Section
1400(b), which as noted above contains two alternatives for establishing proper
venue. However, since the Federal
Circuit’s 1990 holding in VE Holdings
that a company “resided” anywhere a defendant purposefully directed its activities,
provided that the plaintiff’s claim arose out of those activities. Some courts broadly construed VE Holdings, which, in effect, rendered
venue proper anywhere a defendant engaged in business in any way related to the
alleged infringement.

Over time, as a result of this broad
interpretation, certain courts favorable to patent plaintiffs became increasingly
popular district for patent litigation. For
example, the Eastern District of Texas, which covers a largely rural portion of
Texas, emerged as a focal point for patent litigation in the United
States. In fact, in 2016, more than 40%
of U.S. patent cases were filed there, and a single judge in the district—Judge
Rodney Gilstrap—presided over nearly 25% of all patent cases in the nation.In TC
Heartland, the Supreme Court abrogated VE
Holdings and held that a defendant “resides” under patent venue statute only
where the corporation is incorporated or maintains its principal place of
business. Given that most companies do
not “reside” in the favored patent venues under this standard, the focus in
determining venue shifted to the second alternative. Having previously held that the patent venue
statute was irrelevant to the patent venue analysis, the Federal Circuit had
not addressed the meaning of “regular and established place of business” in
over 30 years. District Court Proceedings

In 2015, Raytheon sued Cray, a maker of
advanced supercomputers, in the Eastern District of Texas.[1] Following the TC Heartland decision, Cray challenged venue on the ground that it
lacked a “regular and established place of business” in the district. Although Cray employed a single remote
employee that lived in the district, Cray maintained no facilities in the
district, nor did it have any customers there.
The district court denied Cray’s motion, finding that Cray’s employment
of a single remote employee satisfied the “regular and established place of
business” requirement of Section 1400(b).
The court reasoned that the employee made substantial sales while
employed at Cray, was supported by the administrative office in Minnesota, and
could access promotional materials online from his home in the district. In doing so, the court formulated a
four-factor test to evaluate whether a defendant maintains a regular and
established place of business in a district, which notably did not require a
defendant to maintain a physical presence in the district. Cray filed a petition for writ of mandamus in
July 2017 asking the Federal Circuit to vacate the district court’s four-factor
test and direct transfer to a proper venue.

A “Regular and Established Place of Business” Is a
Physical Location of the Defendant

Prior to the In re CrayInc. decision,
the Federal Circuit’s last word on the meaning of “regular and established
place of business” came in 1985. In that
case, In re Cordis Corp., the defendant
used its employees’ homes in a district to store literature and products, and
relied on those employees to deliver products to its customers. The company also retained a local
administrative service to support the employees’ activities in the district and
publicly listed the service’s address as its own office. In denying defendant’s venue challenge, the
Federal Circuit wrote that the “appropriate inquiry” is “whether the corporate
defendant does its business in [a] district through a permanent and continuous
presence there” and not “whether it has a fixed physical presence in the sense
of a formal office or store.” But the
court declined to provide further guidance for evaluating what constitutes a
“regular and established place of business.”
The issue remained largely untouched for more than three decades.

On September 21, the Federal Circuit
granted Cray’s petition for writ of mandamus, vacated the district court’s
denial of transfer and four-factor test, and provided much needed guidance on
what constitutes a “regular and established place of business” under Section 1400(b). Seemingly mindful of
the dearth of precedent on the subject, the court explained each step of its
statutory interpretation. As a starting
point, it noted that the legislative history of Section 1400(b)
indicated an intent by the legislature to restrict patent venue, not expand it. Further, the court cited the Supreme Court’s
instruction that venue is decidedly not “one
of those vague principles . . . to be given a liberal construction.” With these guideposts in mind, the court set
forth three requirements: (1) the
location must be a “place,” (2) that place must be “regular and established,”
and (3) the place must be “of the defendant.”

The court addressed each prong in
turn. First, it explained that a “place”
must be a physical location. Although a
formal storefront is not required, the court rejected the notion that a
“virtual” or “electronic” presence might create patent venue.Next, the court interpreted the adjectives
“regular and established” to require some showing of stability, or continuity
over time. The court specifically noted
that sporadic or temporary business activities were not sufficient, but indicated
that continuous business for a series of years likely was.

Finally, the court explained that a place
is “of the defendant” if the place was “establish[ed] or ratif[ied]” by it. A number of considerations come into play
here, but significantly a place is not “of a defendant” if it is “solely a
place of the defendant’s employees.” The
defendant, rather, must have some additional connection or control over that
place.Applying this freshly minted test to the
facts of the case, the court determined that venue was lacking because there
was no evidence that Mr. Harless’ house was a place of business of Cray. The court noted that while Mr. Harless
conducted business from his house in the district, there was nothing indicating
that Cray owned Mr. Harless’ residence, selected its location, conditioned his
employment on maintaining his residence, or even believed its location was important
to the work he performed. Stressing that
no one fact was controlling in its analysis, the court concluded that “the
facts [surrounding Mr. Harless’ home office] cannot support a finding that Cray
established a place of business in the Eastern District of Texas.” Accordingly, the court granted Cray’s
petition and directed transfer of venue.

Implications of Decision

In re
Cray will guide patent venue analysis going forward. A key takeaway for employers is that the
typical work-from-home employee will not create a “regular and established
place of business” for venue purposes. In
rejecting the position that such home offices are sufficient, the Federal
Circuit explicitly stated that a “home in which [defendant’s employee] carries
on some work that he does for the defendant” does not meet the standard.

More broadly, the decision will likely
shift much of U.S. patent litigation out of the Eastern District of Texas. While many companies, such as national
retailers will remain subject to venue in the Eastern District, many, if not
most, of U.S. corporations will not."[1] The authors represented petitioner Cray Inc. in this matter.

Sunday, 29 October 2017

The comment section of IPKat posts is a place for vigourous debate, often adding valuable insights to the posts. In fact, Merpel has heard that some people visit IPKat for the comment section (Merpel: I am slightly hurt).

It has always been IPKat policy to allow pseudonymous comments. This allows practitioners, but most importantly insiders of various authorities, to add their insights without fear of repercussions. We understand that some people working for such institutions feel, justifiedly or not, that they cannot speak freely when they are identifiable.

On all posts relating to the European Patent Office, however, the right to post pseudonymously has been abused in recent times. On Merpel's post welcoming the new president of the EPO, the situation got out of hand. The overwhelming majority of comments were purely libellous ad hominem attacks on a man that has not even taken office. This led the IPKat team to decide to remove all comments on said post (IPKat did not receive any legal threats).

Going forward, we do not want to remove the ability to post pseudonymous comments. After all, Merpel is a pseudonym, too (Merpel: are you implying I am not real? Now I am really hurt).

But while Merpel is a critical cat, Merpel is not a libellous cat. He does not abuse the privilege of the pseudonym. Going forward, we will rigourously enforce the following comment moderation policy:

Strictly no anonymous posts, only pseudonymous. This is mostly for readability in long threads.

Strictly no personal attacks on identifiable people. If you need to spew hatred, go elsewhere.

Abanka DD v Abanca Corporacion Bancaria SA [2017] EWHC 2428 is a recent High Court appeal from the UK's Intellectual Property Office. It concerns the revocation of two international trade marks for ABANKA and the related opposition to the application to register ABANCA - no prizes for guessing which party was attacking which mark.

This case is interesting for its discussion of the issues surrounding use of a mark where there are some customers in one jurisdiction but the services are effectively offered in another jurisdiction.

Background

Abanka is a Slovenian bank which since March 2006 has had two UK trade marks for ABANKA for a very wide range of financial services. The Hearing Officer held that no use had been proved in the relevant period so the marks were revoked and, consequently, the opposition was dismissed.

Although there clearly had been some use of the marks, this was one of the scenarios where it is slightly less straightforward to determine whether that use occurred in a particular territory (i.e. the UK) and if so whether that use was sufficiently substantial.

Where is the use?

Abanka is a Slovenian bank which does not hold a UK banking licence so its activities were inevitably somewhat restricted - mostly to serving the Slovenian immigrant community. The main evidence relied on consisted of:

advanced payment guarantees

cheques

80 debit and credit card holders who used their cards in the UK over a six year period

use on the website

a press release about a banking award by a UK magazine

a flotation on the London Stock Exchange to raise funds for the bank

Although many of the services listed above might be fulfilled in the UK, Daniel Alexander QC, sitting as a Deputy Judge in the High Court, distinguished between use of the mark Abanka to an undertaking in the UK as compared to use of the mark ABANKA by Abanka in the UK. In other words, the use of the trade mark by Abanka is in Slovernia to the customer who is offered the advance payment guarantee, credit/debit card or cheques services. Although some Slovenian customers who are resident in the UK were supplied with credit/debit cards it was not clear how many of the cards had been provided as a Slovenian banking service even if they were delivered to a UK address and subsequently used in the UK.

The Abanka website was in English but this was not sufficient to establish an intention to establish commercial relations with English customers. The fact that a website is in English is not by itself sufficient to show that it targets the UK. In particular, there was no "reliable material" to show comparative access of the website from the UK or elsewhere and although it had been accessed in the UK, this was not sufficient to establish that the website targeted the UK market. The fact that Abanka did not have a UK banking licence and therefore could not provide banking services in the UK was relevant but not conclusive.

A press release for an award from a UK magazine was given short shrift. The award was for listing Abanka's shares on the Ljubljana stock exchange in 2008. As the judge put it, "it is difficult to see how being the passive recipient of an award which was largely conferred for successfully recapitalising itself in Slovenia ... assists Abanka in showing use of the mark in the UK...".

Abanka's best hope came from Abanka's application for admission to the London Stock Exchange. Although the purpose of the listing may have been to raise funds for Abanka itself, the bonds could be treated as analogous to goods or services (even if they may be technically categorised as a chose in action). When deciding whether to purchase Abanka's bonds from the LSE, its reputation was clearly important. The judge therefore overturned the hearing officer's decision on this point and held that the bonds were sufficient use in the UK. Although over £1million in bonds is small in the grad scheme of bonds the sales plus the marketing was sufficient to establish genuine use.

Pushed vs pulled

Whether there was use came down to whether there were active or passive sales. Put another way, had Abanka pushed its business and trade mark into the UK or been pulled into the UK by customers who happened to be in the UK.

Parallel decisions in France, Spain and Switzerland reached broadly the same conclusion (apart from on the bonds issue which was only relevant to the UK). The "core message" of these decisions was the same as the UK decision.

Saturday, 28 October 2017

The AmeriKat's face when you try to gether to enforce any decision that is not solely hers

How much are you wanting to read about recognition and enforcement of foreign judgments on a Saturday afternoon? A lot? Great!

To bring readers up to speed, there is new draft legislative instrument to get excited about - the draft Hague Convention on the Recognition and Enforcement of Foreign Judgments.

What is it?

There are ongoing negotiations concerning a new draft Convention that provides for the recognition and enforceability of judgments from contracting states in civil and commercial actions. This means that extra-jurisdictional IP judgments could become enforceable in the UK (and vice-versa).

Where did it come from?

The current draft, from February 2017, can be found here. The origin story of this draft derives from the March 2016 meeting of Council on General Affairs and Policy at the Hague Conference on Private International Law - see minutes here. Following a first proposed draft text in November 2015 by the aptly named "Working Group on the Judgments Project of a Proposed Draft Text", the Council decided to establish a Special Commission to prepare a draft Convention. An Experts Group of the Judgments Project was also established. As noted at paragraph 14 of the 2016 Minutes, "the Council confirmed that this is a priority project for the Conference."

The Special Commission has already held two meetings - in June 2016 and February 2017. A third meeting will be held in November (see below).

Why should I care?

It may (or may not) concern IP. Article 2(1)(l) of the current draft currently excludes IP rights from its scope, but, that exclusion is in brackets as follows (and has its own square-bracketed exclusion):

Article 5 entitled "base for recognition and enforcement" provides a list of conditions or "jurisdictional filters" where a judgment is eligible for recognition and enforcement (generally if the defendant is established/has a place of business in the contracting state). For IP, Articles 5(k) -(m) are applicable and, again, all of these provisions are square bracketed. These provisions state that a judgment is eligible for recognition and enforcement where, generally,

the judgment ruled on the infringement of a registered IP right (Article 5(k));

the judgment ruled on the ownership or subsistence of copyright or related rights or registered IP rights (Article 5(l)); and

the judgment ruled on infringement of copyright or related rights or other rights not required to be registered (Article 5(m)).

Article 6 is a notwithstanding provision. It provides that irrespective of Article 5, a judgment that rules on the validity of an IP right shall be recognized and enforced if and only if the State of origin is the State in which the grant or registration has been applied for or taken place (see Article 6(a)). That is to say, a court cannot rule on the validity of a registered right of another contracting state (which is the position today). As the EU notes:

"This special rule is necessary because the
validity of IP rights required to be granted or registered is subject to the exclusive jurisdiction
of the State of registration under practically all national laws and international instruments,
and the future Hague Convention aims at ensuring and strengthening this rule. "

Article 7 provides for circumstances where there can be a refusal of recognition/enforcement of a judgment, specifically for IP where the judgment ruled on infringement of an IP right but applied to that right law "other than the law governing that right" (see Article 7(1)(g)).

"[...A judgment granting a remedy other than monetary damages in intellectual property matters shall not be enforced under this Convention.]"

So, there goes your often more valuable relief - namely injunctive - but still keeping in play judgments concerning validity. Once the AmeriKat got to Article 12 she thought "well then, what is the point of this?"

What is going on with the square brackets?

As any good drafter knows, square bracketing provisions means that their inclusion is up for grabs. At the first two meetings, delegations had differing views. Some opposed the inclusion of IP all together. Some said only copyright and trade marks should be included. Others thought only licensing litigation should be included, thus excluding validity and infringement.

What is the EU's position?

In favor of including IP rights, of course! At paragraph 4 of the EU's "Discussion Document" on the draft Convention regarding IP rights published last month, it states:

"The EU is in favour of retaining IP within the scope of the Convention. IP rights are an
important economic factor, and a secure legal framework for cross-border cases is of the
essence. Even though the IP rights as such are territorial (which will in no way be changed or
affected by the future Hague Convention), there are many cross-border situations which might
require the recognition or enforcement of an IP-related judgment in another country..."

What does industry make of this?

Industry has been actively engaged in talks with EU representatives on this project. One prominent industry organization, IP Federation, has made its position public with this policy paper. The IP Federation's primary position is that all IP should be excluded.

The paper notes that IP rights are a beast of national law, borders and courts. With limited cross-border harmonization, different courts apply different laws arriving at different outcomes. As such, IP Federation believes "that, in general, this points to a regime of national recognition and enforcement only". Once you start recognizing/enforcing decisions of foreign courts that would never have been arrived at in your national court, things start to go wrong.

The paper also notes the problem with Article 12 referring to financial remedies as "usually only a secondary objective for IP owners, and that such remedies can usually be enforced in the country concerned in any event" and the complexity of the operation of Article 8, when coupled with Articles 5 and 6. The IP Federation provides some worked examples concerning the fictional Ruritania for readers to digest (although, this is not the Ruritania of romance, adventure and intrigue - but of patent judgment enforcement....)

The IP Federation states that

"..If it is not realistic to exclude IP altogether, we believe that
patents alone should be excluded, since patents can be distinguished from
other IP rights in certain respects. Most importantly, patent law is a
particularly complex area. In jurisdictions that see a lot of patent litigation
there are specialist courts to deal with the cases (this is the case in Germany,
France, UK and the Netherlands for example). The convention would
however allow decisions with multijurisdictional effect to be decided in a
way that requires recognition and enforcement, even when the decisions are
made by courts that are inexperienced in their own domestic patent law, let
alone the application of foreign law. That is not a situation that carries any
benefit to EU businesses. "

If IP is included, the IP Federation provides a list of safeguards, including refusal to recognize punitive damages and explicit exclusion for anti-trust issues.

Has anyone else commented?

INTA has - see their Board Resolution here. INTA's view is that they support the inclusion of registered and unregistered trade mark rights in the draft Convention and the ability for trade mark judgments to be recognized and enforced "across borders". INTA resolves, however, that the final draft

"must contain provisions ensuring the
maintenance, protection and respect of the sovereignty of the ruling courts and the principle of
territoriality of trademark rights and trademark judgments, particularly with regard to judgments
ruling on the validity of trademarks."

INTA's paper refers to an issue flagged by the IP Federation paper in their "secondary position" (i.e inexperienced or otherwise courts). It states:

"The Subcommittee is aware of and has discussed the fact that judgments may originate from
countries with lesser standards of judicial integrity and therefore be obtained under questionable
circumstances. However, it is the Subcommittee’s position that the safeguards as provided in the
Convention and in general international law statutes allow for sufficient judicial discretion, and
that the benefits arising out of the application of this Treaty far outweigh potential risks. The same
applies for the possibility that the Convention may be used against brand owners but again, the
draft includes provisions which ensure the protection of defendant’s rights.

While details of the application of the Convention to Intellectual Property Rights are still being
discussed among the Delegates and INTA will continue to closely monitor the process, the
objective of the Convention is to provide an important tool in the fight against globalized trademark
infringement which will enable brand owners to follow the infringer’s assets across borders. It is
INTA’s position that this general objective is beneficial to our members and should therefore be
supported even if some of the specifics still require refining. Advocating for this treaty is an active
implementation of INTA’s strategic mission of advancing trademark protection to benefit brand
owners. "

What is really driving this?
The AmeriKat ponders whether that, in light of the slow (but upcoming) progress on the IP Enforcement Directive reexamination, the EU is really targeting efforts on this project in order to find a quicker solution for the demand for quicker/cheaper enforcement for online infringement (a key priority for the Commission following the IPRED consultation). Indeed, one can see echos of this on page 5 of the EU's Discussion Document. If that is one of the key drivers informing the EU's position, then perhaps there is a middle ground to strike between the position of INTA and the secondary position of IP Federation. But, for the AmeriKat's part, further work needs to be done to even be sure that the operation of the relevant IP articles is even fit for purpose. What is next?

From 13-17 November 2017, there will be a third meeting of the Special Commission on the Recognition and Enforcement of Foreign Judgments. So if readers have any comments or views on the proposal before then, time to put pen to paper.

In light of the recent EU
Commission paper, Dr. Ilanah Simon Fhima in Brexit:
The IP Position Paper and trade marks discusses what could be the
future for the comparable protection for trade marks and for the
rules of exhaustion envisaged in the paper.

Never
Too Late 165[week ending Sunday 24
September] German Federal Court of Justice rules that GS Media presumption of knowledge does not apply to Google Images| Life as an IP Lawyer: Washington, D.C.| Furie-ous creator of Pepe the Frog determined to use copyright to get his green creation back | Book Review: Marketing and Advertising Law in a Process of Harmonisation | Special
interview with the Chief Executive of the Intellectual Property Office
of Singapore on new one billion dollar innovation fund (and more) | Conference Report: Zurich IP Retreat 2017 - Patents and Hindsight (Part I and II) | Does Allergan's Saint Regis Mohawk Tribe transactional move "rip off consumers"?

Following
government plans for a new industrial strategy, the UK IPO are looking for your
views on a range of specific ways they can get innovators to work together more
effectively and get the most out of their IP. This consultation
closes at 11:45pm on 15 November 2017, full details here.

Hot off the
Press

On top of all the latest news...

EU
innovators are developing a best practice code of conduct for licensing
Standard Essential Patents for 5G and the Internet of things. The
project started at a Cen-Cenelec Workshop held in Paris, against the backdrop
of an upcoming communication from the European Commission on the system of
FRAND licensing of Standard Essential Patents. Please find a full press
release here.

Dutch IP publisher B9
Publishing has launched a new international IP website:IP-PorTal. IP-PorTal publishes EU intellectual property case law
and legal texts for European IP-professionals and students of European IP law.
The site contains IP-decisions by the CJEU from 1966 and a selection of cases of the Enlarged Boards of Appeal of the
European Patent Office (EBoA) and other judgments by leading international
courts. The collection contains more than 700 judgments and all relevant
European IP legal texts.

The
Institute for Information Law (IViR) has announced that
Daniel Gervais has been appointed Professor of Information Law, in
particular trade and investment related aspects of the information society, at
the University of Amsterdam, Faculty of Law. Read the University’s official announcement here.

Opportunities

Junior
Research Position: The Department of Engineering and Information Science of the
University of Trento is recruiting a temporary junior researcher in media and
telecommunications law (at the post-doctoral, PhD or master level) for a period
of 12 months to produce legal information and policy recommendations for
community networks, as part of the netCommons
project, which focuses on the study of Internet community networks (CNs) in
Europe managed as commons. Full details here.

Events

INTA
is holding a couple of back-to-back educational events in Berlin: a workshop on
Free Trade Zones (on November 29) and a conference on Brand Authenticity (November
30-December 1). Full details here
and here. Their 2018
educational calendar and Europe Conference will be held in February (26-27) in London
on the topic of designs, details here.

The
UCL Institute of Brand and Innovation Law and George Washington University’s
Faculty of Law announce their 3rd Conference on Patents in Telecoms and the
Internet of Things. The conference takes place on Thursday 9th and Friday
10th November 2017, in Washington DC, details here.

OxFirst
are offering an online Webinar on 31st October 2017 from 13:00-
14:00 titled - Open Growth: The contribution of Open Source Software and
Defensive Patent Pools to Innovation. The Webinar will be resented by Keith
Bergelt, CEO of Open Invention Network. You can sign up here.
The Royal Society of Chemistry Law Group will be holding its ninth annual and highly popular IP case law seminar on Thursday, 9 November 2017 from 1 to 5pm at Burlington House, Piccadilly, London W1J 0BA, followed by a networking drinks reception.

The LexTranslate Kat

New legal
translation service for IP documents and decisions!

A translator of legal documents should be a lawyer and a linguist. Katfriends
Diana Vaccaro and
Simonetta Buccellato wish to let IPKat readers know that they provide such
service: LexTranslate has in fact created a network of lawyer-linguists combining their legal expertise with an extensive knowledge of foreign
languages.

What if “application for a
trademark” is translated in Spanish with “demanda de marca” instead of “solicitud
de marca” or “patent claim” in
Italian with “richiesta del brevetto”
instead of “rivendicazione del brevetto”;
or if a translator is not familiar with the IP authorities’ websites?

When a client assigns
a translation task to LexTranslate, it gathers: (1) High quality
services in more than twelve languages; (2) Translations by legal
experts specialized in the area of law relevant to the source document; (3) Full compliance
with confidentiality and
timing agreed.

No margin for error with legal translations is
admitted and LexTranslate will avoid this risk. To learn more about Diana and Simonetta’s
services, visit www.lextranslate.com

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